What You Need to Know About Global Employer of Record


So, what is this “employer of record?” Basically, this is a corporate entity that’s been set up with a sole purpose of making it easy for multinationals to set up shop faster and do business more efficiently and conveniently in foreign countries. For more on global employer of record be sure to click here and learn. In addition, here are a few useful facts that you need to know about these special entities and how they operate:

Global employer of record as a Foreign Subsidiary

An employer of record acts as a subsidiary of the client company in the country of operation. Basically, this means that the entity takes over some of the vital functions of the company and represents their interests as its own.

For example, an employer of records takes over payroll processing functions for the client company in a given country and reflects that under its own tax identification number. They employ and manage workers under their own umbrella. In fact, the client company management is mostly not involved in on-the-ground running of its operations.

They Handle Company Legal Affairs

For one, a company seeking to establish a presence in a foreign country will obviously need a good experienced team to deal with any legal hurdles involved in the transition process as well as entry into the new market. For this, a good global employer comes in handy in visa applications for the senior company employees flying in. It also drafts and vets employment contracts for the employees to be employed in the new branch establishment.

Besides all that, this global entity makes sure that the client company gains access into the local market in the smoothest way possible. This also involves working out tax issues and other legal frameworks needed to enter the local market.

They Handle Employee Issues

When a company expands base into a country under a global employer of record, it doesn’t have to start searching for employees in the country. The employer of records handles that. In fact, the entity may already have a workforce ready for deployment, and that enables the client company to hit the ground running and establish a market presence right away.

The employer of records is also responsible for handling employee health benefits, terminations, and human resource management. To reduce the costs incurred, the entity may bargain for a lower-cost collective insurance package for the employees. With this, they get a better deal than an individual employee would if they signed up each on their own.

Looking at the simple points above, you can understand why so many companies are opting to call up a global employer of record when they need to set up shop in a new country or market jurisdiction. It’s because these helper companies are convenient to work with.


Staff writer